Can you make QCDs in 2021?

In March of 2020, the Coronavirus Aid, Relief, and Economic Security (CARES) Act was adopted. CARES suspended the RMDs from retirement accounts for 2020, including IRAs, 401(k), 403(b) or 457(b). As for 2021, if the CARES Act is not extended by Congress, individuals will be required to take their RMDs.

The QCD rules have not changed; you can still make such distributions and enjoy the tax-related benefits that come with QCDs.

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Who is eligible to receive Qualified Charitable Distributions?

The IRS is the one who decides what types of organizations are qualified to receive such distributions. Their list of qualified charities includes the following:

• “Organizations operated exclusively for religious, charitable, scientific, testing for public safety, literary, educational, or other specified purposes”
• A community chest, corporation, trust, fund, or foundation
• Churches, synagogues, or other religious organization
• War veterans’ organizations
• Civil defense organizations operating under federal, state, or local law
• Domestic fraternal societies operating as lodges (conditioned that the contribution is used for charitable purposes)
• Nonprofit cemeteries as a whole

Charitable donations can also be made to states or the federal government, provided it is exclusively made for public purposes. Check the IRS website to see if the organization you would like to make charitable donations to, is registered and can accept donations.